Wednesday, March 31, 2010

The average teacher salary in 2008-09 is $64,555 for 129,185 positions.

About $8.3 billion in total. That was a 3.01% increase over the previous year.

Assume another 3% raise the next year: that's $250 million more in salary. Now imagine teacher wages get frozen.

Assume that frozen money would have been taxed at 5.5% in state income tax. That's a little low, because income over $75K is taxed at 6.4%, but whatever: we'll round that up to make up for it to about $14 million.

Now, Gov CC wants to refund the money that would have been spent by the state on FICA to the districts. At 7.65%, that's about $19 million. But he has to take out $14 million, because "the offer won't cost the state any more money."

That means that Christie has a total of $5 million to spread around to "reward" districts for freezing salaries.

Add another $10K to the average salary for benefits. He will save 250 average jobs. 0.2% of total teaching positions. Heckuva job, Chrissy.

By the way, in the Star-Ledger, they posited a district with savings of $1 million from a freeze. If that's 3% of the total of teacher salaries budgeted, the district has about 515 employees (assuming the state average wage - a big assumption, for sure, but OK for our purposes). The $75K is balanced by the loss of income tax at $55K for a $20K "reward." About a .25 FTE position. 1/2060th of the district's workforce.

Governor Christie, most people in New Jersey, myself included, agree that the State's financial situation is dire, that the funding process for public schools is broken and needs to be fixed, that pension reform is critical, and that the time to begin addressing these issues is not tomorrow, but now. But where we disagree comes to the fore with regard to how this all came about and how we/should go about fixing it.

The Super in Glen Rock nails it. Some highlights:

1. Make us -ALL of the stakeholders here-a partner in the process. This first item is the most important of all. Please stop talking ill us! Talk to us! We are not the enemy!

Most importantly, why are legislators who take advantage ofdouble-dipping (as well as lawmakers who serve on a part-time basis) and in the pension systems grandfathered when public school employees with 25+ years ofservice are not?

...get rid of subsidies and "tax-incentives'! (read giveaways) to rich business owners who are making or stand to make multi-millions of dollars off the backs of school children. Xanadu. The Prudential Center. AtlantiC City Casinos. These three areas alone have cost New Jersey, literally, hundreds upon hundreds of millions.

Specifically, immediately drop four of the seven years of state testing that are now required of all public schools, but particularly for those districts designated as "highachieving" by your own Department of Education. Students who can score an 85% passing rate year-over-year do not need to have instructional time wasted with over-testing.

Reign in Horizon Blue Cross/Blue Shield's 20%-35% annual increases and your financial worries for New Jersey will be well on their way to being solved forever.

Just read the whole thing, then demand this guy take over for Bret Schundler immediately.

The Bridgewater-Raritan Board of Education adopted a budget that would lay-off nearly 70 teachers and raise taxes today, but last minute concessions from the local teachers’ union saved more than a dozen jobs and restored funding to sports and extracurricular programs.

The teachers are sacrificing, and they're still cutting jobs. "MORE SACRIFICES!" How many? "AS MANY AS IT TAKES!"

Baker said he did not sense a conciliatory tone in the governor’s letter.

"If it was a genuine attempt to reach out to the NJEA, he would have made an attempt to reach out and have a discussion, not just send out a letter he released to the press," Baker said.

Has the governor met a camera he didn't love?

And I was interested to learn:

The state has paid districts’ portions of employer payroll taxes and pensions since the mid-1950s, when state aid provided a very small share of public school revenue, school boards association spokesman Frank Belluscio said.

Here’s some fact checking of the rhetoric, from Christie’s interview Sunday with WWZY radio and from recent statements by the NJEA:

He starts with Christie's claim that no district lost more 5% of their budget:

In some districts — 51 out of 582, precisely — the aid cuts did amount to more than 5% of their overall budget.

How about Christie's claim that "If every teacher in New Jersey this year took a pay freeze, just for one year, and paid 1.5% of their salaries toward health benefits, that would make up $800 million":

...every school employee, from superintendents through lunch ladies, would have to take a pay freeze to save a bit over $565 million. Another $200 million would be saved if every worker paid 1.5% of their salary toward health care.

Christie then gets the number of teachers in the state wrong by 50K - not a huge error in terms of the debate, but if you're going to throw around statistics about something you've made the focus of your policy, try a little harder to get it right.

OK, so now the reporter's job is to equate the NJEA with the Gov. And this is what Symons comes up with:

NJEA President Barbara Keshishian says the governor has decided to “deliver generous tax cuts for the super wealthy.” Last year, she said, that “very modest tax on the very wealthiest New Jersey residents, those making more than $400,000 per year” generated nearly $1 billion in revenue for the state.

In my mind, to equate with Christie's mistruths, she either a) needed to get that $400K figure wrong, or b) get that $1 billion wrong. Did she?

Christie didn’t cut income taxes on households with incomes of $400,000 or more. They were raised last year for one year only by Gov. Jon Corzine and Democratic lawmakers, then expired while Corzine still held office. Corzine said he didn’t propose extending the tax increase in deference to Christie’s opposition. It’s unknowable whether Christie would have proposed cutting that tax if it had been extended — but Christie hasn’t pursued other promised tax increases and said often as a candidate that tax cuts would have to wait until later in his term because of the condition of the state budget.

Um, no. The tax was there - now it's not. Blaming Corzine for letting it expire lets Christie off the hook way too easily. And Keshishian says "deliver," not "cut" - I think that's more than fair.

In any case, this is all semantics. If the second part of the graph makes the case that Christie would have kept the tax had Corzine enacted it, all the more reason to wonder why he's not enacting it now. This is a CHOICE he's making.

It’s not yet known how much revenue the so-called millionaires’ tax generated, as much of that impact depends on final income-tax filings that won’t be made until April.

It's just plain silly to blame Keshishian for this; all budgets are forecasts. Besides, right afterward, Saymons writes:

Moreover, the increase in income tax rates was projected to generate around $900 million — $83 million on incomes of $400,000 to $500,000, on which the tax rate rose temporarily from 6.37% to 8%; $620 million on incomes of $500,000 to $1 million, on which the tax rate rose from 8.97% to 10.25%; and $200 million on income over $1 million, on which the tax rate rose from 8.97% to 10.75%.

So Keshishian is wrong to use those projections? Or is she not supposed to make a case here until the final concrete numbers come in? And this is equivalent to Christie misstating what we know as facts? Would you have this complaint if she had used the word "projected"?

Finally:

Another $100 million, which brought the projected impact of the 2009 law to around $1 billion, derives from barring homeowners with incomes over $250,000 from deducting their property taxes from their income taxes and capping at $5,000 (cutting in half the maximum deduction) the deduction for taxpayers with incomes between $150,000 and $250,000. However, all the political support for the millionaires’ tax talks about affected taxpayers with incomes of $400,000 or more, not $150,000 or more.

But, Mike - you didn't say how much of that $100 million comes from folks with incomes over $400K. It's got to be part of it at least - maybe most of it. But you add whatever it is to the $900 million, and you've got "nearly $1 billion" - which is what you attribute to Keshishian in the first place.

Let's compare:

Christie: Said no district lost more than 5% when 51 did. Says if every teacher took a freeze and paid 1.5% on their health insurance, that would be $800 mil, when it would have to be everyone working in the schools - not just teachers - and it still comes up short. Got the number of teachers in the state wrong by 50K.

Keshishian: Said Christie "delivered" a tax cut for the wealthy on a tax Corzine let expire but Christie refuses to reinstate. Using official projections of the tax's revenues instead waiting for final numbers to come in. Calls nearly $1 billion "nearly $1 billion."

This is my major frustration with the press: they just won't make judgement calls, even when they're this obvious. Michael Symons is obviously a smart, well-informed guy, but he is in the thralls of "balance," which has become the enemy of "truth."

Robert Reboli, a basic skills and remedial English teacher at Madison Avenue Elementary School in Irvington, has some advice for his fellow educators as they prepare to fight Gov.Christopher Christie’s proposed state budget: “Never trust a fat f***.”

But comments posted on the social networking site – most of them during school hours -- often get personal as they exercise their first amendment rights.

Quick, get the fainting coach! And during their lunch hours! On school internet connections!

You know, Wally, if the Governor of NJ told your employer to expect a 15% cut in aid, and then cut it all, and then said you need to take a pay freeze and pay more for your benefits, and kept saying he wasn't demonizing you, except when he was, you might be a bit impolite yourself.

And nice job looking up the salaries of teachers and adding it to the story. Classy.

Look, I don't want to get all sanctimonious here: reporters don't often get a chance to really think about these things in the heat of an interview or presser. I understand that. But this is not that arcane of a point, and any time a politician tells you he's giving away money and it won't cost a thing, you need to stop and think a little.

Christie, like any powerful leader, needs to answer up to what appear to be flaws in his policies. Who's going to ask?

Citing information from the New Jersey Department of Education (NJDOE) which shows more than 725 school administrators making more than $141,000 annually, including nearly 60 school superintendents drawing annual salaries of $200,000 or more, Rible said, “Such exorbitant salaries are, in part, to blame for the high cost of property taxes associated with education in New Jersey and the state’s chronic budget deficits...

Believe it or not, I know a little about the private sector. If you tried to get someone to run a business* that had 500 employees and $50 million in revenue for under $136K, you'd be pretty disappointed at the resumes showing up on your desk.

But aside from that, what makes Rible think that the Education Commissioner is more qualified to run anything than a school superintendent?

Schundler began his career in finance in the sales department of Salomon Brothers. While he had no experience in the field, his interviewer thought that anyone who could sell Hart in western Iowa had a future in finance. In 1987, he moved to a different firm, C. J. Lawrence, which has since been absorbed into Deutsche Bank. He retired in 1990...

(I just love Wikipedia entries that were so obviously written by campaign staffers)

Add to this Mayor of Jersey City and two failed gubernatorial campaigns, and you've got the resume of a real educational leader, yes?

As I pointed out before, however, the state will lose out on the income tax that would have been collected on that $900K. Assume a conservative 5%, that's $45K. He really can only afford to give Montclair $25K. Where's the rest of the money, Gov?

It's been a talking point of Gov. Christie that we missed out on a lot of dough from Race To The Top because the teacher's union wouldn't get on board:

Just how arrogant has the union gotten? By refusing to accept merit pay and use it to reward their best members, the union may have cost New Jersey $400 million in race to the top school aid from Washington. They did this in a year when they complain about budget cuts; in a year when we could truly use the money. Ask yourself, just who is putting their personal interests ahead of our children’s?

Delaware will receive approximately $100 million and Tennessee $500 million to implement their comprehensive school reform plans over the next four years.

NJ apparently asked for $400 million, but, again, one would assume that would be over 4 years. $100 million isn't monkey chow, but in a year when he cut $1.3 billion from the schools, it only accounts for 8% of the cuts. Did the governor mention that in his screed? Wait, let me look again...

Gosh, he left that out. What a surprise.

Oh, and did I mention it turns out the lack of NJEA support was only part of the reason the grant was rejected:

It was unclear whether county offices, instruction specialists and the New Jersey education department had the "capacity, knowledge and skills necessary" to support districts in making major changes.

The application did not show how teacher evaluations would affect promotions.

The state did not maintain data to show which teachers were highly effective.

The state lacked a plan for removing ineffective principals, cutting the number of ineffective teachers and making sure an equitable share of talented faculty worked in high-poverty schools.

I'm sure the governor's staff is working hard to blame the NJEA for all of the above.

If people want to go into professions where most pay is based on commissions and bonuses, they'll go into the ones where the rewards can be large, like real estate sales or finance. We're not going to improve America's schools by first turning teaching into a factory job, and then paying the workers on a piecework basis.

I'll say it over and over: schools should be run efficiently and transparently, but they are NOT businesses.

The poll, conducted between March 23-28, found 32 percent of voters disapprove of the job Christie is doing. In a March 3 Fairleigh Dickinson poll, the governor’s approval rating was 52 percent, with 21 percent disapproving of his performance. His personal popularity has taken even more of a hit, with 38 percent of voters viewing him favorably and 39 percent unfavorably – down from a 47 percent favorable to 25 unfavorable rating before his budget speech.

Couldn't happen to a nicer guy. Oh, and how about this:

Sixty-two percent approved of his proposal to cap property tax hikes at 2.5 percent and the same percentage favors increasing the income tax on households earning over $400,000.

I hope the Jersey Dems show a little more brass than the national ones and push this $400K+ tax hard; it's needed and it's a political winner.

The offer won't cost the state any more money. The Republican is offering to give districts all the money the state would save on Social Security and Medicare payroll taxes as a result of the wage freezes.

In my experience, anytime a guy like Christie comes along offering a free lunch, you'd better stop and look hard.

First thing we need to remember is that Social Security/Medicare taxes, or FICA, are split between the employee and the employer. Each pays 7.65% to cover both Social Security and Medicare. (I didn't realize until today that the state of NJ reimburses districts for paying the employer's share of FICA. Why is that? I'm trying to find out; something with the pension I'm guessing...)

So, if you have a wage freeze, the district saves not only the amount that they would have raised the employee's wages; the state also saves 7.65% of that raise in taxes.

For example, take a teacher making $50K, scheduled to get a 4% raise. The school district not only gets to save $2000 on a wage freeze, they also save the extra FICA tax they would have had to pay on the raise - here, $153.

But WAIT! Would the teacher have had to pay STATE INCOME TAX on the raise?

They sure would have. How much would that be? Well, the rate on income at the level is 5.525% - $110.50 in our example.

That makes the total savings to the state $42.40 for every $2000 frozen. Put another way: total savings on $1 million in frozen wages for the State of NJ is $21,200, or 2.12%.

Now, how much is Christie going to give out?

But if teachers agree to wage freezes, districts could see a significant increase in aid. For example, a district that saves $1 million in salaries as a result of wage freezes would receive an extra $75,000 in state aid.

Now, he gets that $75K figure because he figures he's saving 7.65% on the wage freeze. But he's not collecting income tax on it - he's really only saving about $20K (hey, if he can round, so can I).

- The biggest problem in the American political system right now is the press. We have a press that is populated by writers and media "personalities" who largely do not know what they are writing about. The press allows politicians to make lazy, ill-informed pronouncements about and decisions on policy because the members of the press are often lazy and ill-informed themselves.

Democracy is doomed unless we demand that this stop right now.

- I'm proud to be a teacher. And I mightily resent my governor's attitude toward my profession, which alternates between patronizing and contemptuous.